|Posted on October 4, 2017 at 10:40 PM|
Acronyms are everywhere and in every profession. I’ve worked as an educator for nearly fifteen years and every school year we get brand new, cleverly-abbreviated terms: STAAR, TAKS, NCLB, TAAS (I bet you remember that one if you went to school in Texas in the 90s). The mortgage process is no different. When you begin to discuss loan types and options with your mortgage team, you’ll start to hear so many abbreviations that you just might begin to feel like you’re texting a teenager: FHA, FICO, MI. OMG, WTH?
During the home-buying process, the first acronym you’ll probably encounter is FICO. This refers to your credit score, something that is pretty critical when buying a house. I’ve written quite a bit about credit scores and repair; for more information, read some of my earlier posts.
FHA and VA are two acronyms that refer to loan types. FHA stands for Federal Housing Administration and is a mortgage program that is managed by HUD (there’s another one!). HUD stands for the Department of Housing and Urban Development, a part of the federal government. VA is a loan program for members of the military (U.S. Department of Veteran Affairs). There are also USDA (United States Department of Agriculture) loans for rural borrowers.
When considering mortgage options, there are also loan types with acronyms. ARMs (Adjustable Rate Mortgage loans) have changing interest rates (as opposed to fixed-rate loans). MI (Mortgage Insurance) is another term that may come into play when you’re purchasing a house.
If all this confuses you, consider yourself normal. The experts at Team Neal can answer all of your questions and walk you through every step of the process to help you make the best and most informed decisions about your mortgage. If you’re considering purchasing a house, give them a call and they can tailor a mortgage that is right for you. And they’ll do this while answering any questions that come up along the way.